Vodafone India Ltd and Idea Cellular Ltd on Monday said that they have separately agreed to sell their standalone tower businesses to ATC Telecom Infrastructure Pvt. Ltd for about $1.2 billion.

The standalone tower businesses of Vodafone India and Idea are pan-Indian passive telecommunication infrastructure businesses, comprising a combined portfolio of approximately 20,000 towers with a combined tenancy ratio of 1.65x as of 30 June 2017, the companies said in a joint statement.

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Idea and Vodafone are also getting merged with each other, excluding the latter’s 42% stake in Indus Towers Ltd, heralding the creation of India’s largest telecom company in a $23 billion deal. The merger is aimed at dominating a market which billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd has disrupted with free voice calls and low data prices. Jio, in which Ambani has invested $20 billion, launched its services in September. The merger will create the world’s second-largest and India’s largest telco, overtaking Bharti Airtel Ltd. It will have almost 400 million customers with 35% customer and 41% revenue market share. It will have revenue of Rs81,600 crore and an operating profit of Rs24,400 crore. Together, Idea Cellular and Vodafone India have a debt of Rs1.08 trillion. The merger is expected to be completed in 2018.

In the event that the completion of the sale of the standalone tower businesses precedes the completion of the proposed merger of the two telecom companies, Vodafone India will receive $592 million, while Idea will get $615 million.
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